Job Losses Force Focus on Entrepreneurship, Industrialisation

Immigration

Over four million Nigerians lost their jobs last year, according to the National Bureau of Statistics (NBS). The unemployment rate rose at an all-time high of 18.8 percent in the third quarter of 2017, with NBS projecting that the figure might get worse. The grim statistics, which underscored the economy’s vulnerability despite exiting the recession, may have prompted renewed focus on entrepreneurship, industrialisation and stronger public-private sector collaboration this year. 

Grim statistics abound to challenge economic managers working with the private sector to halt the unemployment rate in the country.

The National Bureau of Statistics (NBS) brought the reality of the crisis in the labour market nearer home when it said that in nine months, last January to September, 4.07 million Nigerians lost their jobs.

The Bureau, in its unemployment report for third quarter of last year, said the number of Nigerians that became unemployed rose from 11.92 million in the first quarter of last year to 13.58 million and 15.99 million in the second and third quarters.

It said between the second and the third quarters, the number of economically active or working age population (15-64) increased from 110.3 million to 111.1 million.

It said the population of Nigeria’s labour force increased from 83.9 million in second quarter 2017 to 85.1 million in third quarter, while the total number of people in full-time employment (at least 40 hours weekly) declined from 52.7 million in second quarter to 51.1 million in third quarter.

The Bureau added that unemployment rate increased from 14.2 per cent in fourth quarter 2016 to 16.2 per cent in the second quarter and 18.8 per cent in third quarter.

The NBS report further said the number of people within the labour force who are unemployed or underemployed increased from 13.6 million and 17.7 million in the second quarter, to 15.9 million and 18 million in third quarter.

According to it, the total unemployment and underemployment combined increased from 37.2 per cent in the previous quarter to 40 per cent in third quarter.

The Bureau, among other disturbing revelations, emphasised that the increasing unemployment and underemployment rates implied that though the economy was out of recession, the domestic labour market was still fragile.

NBS added that growths in the past two quarters of last year had also not been strong enough to provide employment in Nigeria’s domestic labour market.

Though disconcerting, the unemployment figures churned out by the NBS only confirmed what not a few Nigerians and operators in various sectors already knew: Nigeria’s unemployment crisis has reached frightening dimension.

The situation, they noted, requires more efforts by various tiers of the government, private sector operators, development partners, unemployed Nigerians and other critical stakeholders to stem the tide this New Year.

Even before the NBS report, which jolted Nigerians and also put the administration on the spot with regards to promise in job creation, experts in the employment space had consistently canvassed increased support for entrepreneurship, particularly for Small and Medium Enterprises (SMEs).

They also argue that there is no better time than now to put more steam into the drive for industrialisation.

The United Nations Industrial Development Organisation (UNIDO) Regional Office, Nigeria, is one of those that has long pushed this position by calling on both the Federal and State Governments to increase their support for entrepreneurship and industrial development, noting that this could be done by putting in place more business –friendly policies and incentives.

The Officer in Charge, UNIDO Regional Office, Nigeria, Dr. Chuma Ezedinma, did not mince words when he noted: “Entrepreneurship and industrialisation are two important ingredients for stimulating economic growth, job creation and poverty reduction in both developed economies and economies in transition including Nigeria.”

Ezedinma, who spoke at a UNIDO Stakeholders’ Workshop in Abuja, also said increased support for SMEs could help tame the unemployment monster.

“Successful SMEs are the primary engines for job creation, income growth, and poverty reduction. Small businesses broaden the base of participation in society, create jobs, decentralise economic power, and give people a stake in the future.”

He said the government could encourage entrepreneurship and small businesses through its tax policy (corporate tax rate reductions, tax credits for investment and tax holidays).

Others are regulatory policy (simpler regulatory processes and reducing the cost of compliance with government regulations), access to capital (here the proposed development commercial banks can be of assistance), and the legal protection of property rights.

UNIDO has been at the forefront of promoting Inclusive and Sustainable Industrial Development (ISID) in Nigeria and globally. It has never hidden its intention to support and partner the government and private sector in order to achieve this.

But, going by the NBS latest unemployment statistics, the government and private sector appear to have failed to work with the Organisation to enable Nigerians benefit maximally from UNIDO’s global expertise in the area of entrepreneurship and industrial development.

However, a new dawn may be in the offing for unemployed Nigerians this year as job creation appears to engage the attention of government and the private sector.

Worried by the fragility of the domestic labour market, despite the economy’s exit from recession, members of the Organised Private Sector (OPS) have urged the Federal Government to adopt measures to create jobs this year.

The OPS in its reaction to the 18.8 per cent unemployment rate, noted that many employers, including the public sector, found it difficult to pay workers as and when due.

The OPS said this had necessitated the need for measures that would impact on citizens’ welfare, especially lower food prices, reduced cost of healthcare, improved transportation system, constant power supply and security of lives and property.

Noting that Nigeria’s unemployment rate was one of the highest in the world, Lagos Chamber of Commerce and Industry (LCCI) Director-General, Mr. Muda Yusuf, said increased support for SMEs and business start-ups through capacity building and funding would help.

He identified lack of finance, inadequate infrastructural facilities, shortage of skilled manpower, poor entrepreneurial skills and lack of enabling operating environment, among others, as some of the challenges holding SMEs down. He, therefore, said there was the need to address these challenges to unleash SMEs’ potential.

According to Yusuf, SMEs boast huge potential for employment generation and wealth creation, if adequately encouraged. He said by helping to create more jobs, SMEs reduce unemployment and its associated high crime rate.

Indeed, the rising spate of unemployment, particularly among the youths, according to the experts, was responsible for the various vices plaguing the country. They include political instability, civil unrest, rising crime wave (kidnapping, robbery, cultism, prostitution, advanced fee fraud, otherwise called ‘419’) and reduced wages, among others.

To curtail the rising crime wave across the country, experts have called on the government to fast-track its diversification strategy as encapsulated in the Economic Recovery and Growth Plan (ERGP) by supporting growth in income enhancing and job creating sectors, such as SMEs, mining and agriculture.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

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